Oliver Kazunga, Acting Business Editor
MIDLANDS-BASED ferrochrome producer, ZimAlloys is set to recruit over 500 workers within the first 18 months of operating under a new investor.
ZimAlloys, which was placed under judicial management in 2014, has secured a new investor, Balasore Alloys which is expected to pump in $100 million to revive operations at the company.
The troubled company ceased operations in 2008.
Last month, it was reported that ZimAlloys’ creditors had approved a scheme of arrangement that would see it extinguishing a $60 million debt.
The new investor is expected to take over ZimAlloys, once a court order has been finalised following the approval of the scheme of arrangement.
ZimAlloys judicial manager Mr Reggie Saruchera told Business Chronicle yesterday:
“The scheme of arrangement was approved and what is now left is for the finalisation of legal processes by the Registrar of Companies, which process would be done within this month.”
Balasore is one of India’s leading ferrochrome producers and is controlled by the Mittal family.
“As the new investor comes in, over 500 jobs will be created within the first 18 months of resuming operations.
“At the moment, the company employs 300 people,” said Mr Saruchera.
At its peak, ZimAlloys employed thousands of workers directly and indirectly across the downstream industries.
In the past, the Midlands-based company failed to attract potential suitors due to the $60 million debt.
However, in 2017 the Zimbabwe Asset Management Company, a special purpose vehicle created by the Reserve Bank to hive off debts from ailing firms to free their balance sheet, took over ZimAlloys’ $21 million worth of Non-Performing Loans that were held by a number of local banks.
In this light, Mr Saruchera was able to source an investor for ZimAlloys.
The ferrochrome miner, which was sold to Benscore consortium for $10 million in 2005 failed to take-off as was anticipated due to poor performance related to the closure of its four furnaces, poor global metal prices and escalating operational costs.
As present, ZimAlloys was focusing on strategies to build its capacity to beneficiate, rather than exporting raw chrome ore.
This was in line with the Government’s thrust on value addition and beneficiation which seeks to ensure the country generates more revenue from its exports rather than exporting raw or unprocessed products.
The ferrochrome producer has also ceded 50 percent of its reserves to Government following a directive that the company together with Zimasco, they surrender part of their chrome claims.
Before surrendering half of its chrome reserves, ZimAlloys had 32 000 hectares along the Great Dyke. – @okazunga.
Article Source: The Chronicle